Economic Indicators - In July, China's CPI increased by 0.4% month-on-month, reversing a 0.1% decline from the previous month, and the year-on-year core CPI rose by 0.8%, marking the highest increase since March 2024 [3] - The PPI in July decreased by 0.2% month-on-month, but the decline was narrowed by 0.2 percentage points compared to the previous month, marking the first contraction since March [3] Agricultural Sector - The Ministry of Agriculture and Rural Affairs reported that China's pork production and consumption account for about 60% of total meat consumption, and measures will be taken to adjust the breeding of approximately 1 million sows to prevent price volatility [3] Small and Medium Enterprises - The China Small and Medium Enterprises Development Index (SMEDI) for July remained stable at 89.0, with significant increases in sectors such as construction, transportation, real estate, and information technology [3] Trade and Tariffs - The U.S. trade-weighted average tariff rate has risen to 20.11%, significantly higher than the 2.44% at the beginning of the year, indicating a substantial increase in trade barriers [5] - The World Trade Organization has downgraded the global goods trade growth forecast for 2026 from 2.5% to 1.8%, citing recent tariff adjustments as a negative influence on global trade prospects [5] International Relations - European leaders emphasized that any diplomatic solution regarding the Ukraine crisis must protect the significant security interests of Europe and Ukraine [5] - Discussions are ongoing between Qatar and the U.S. regarding a comprehensive ceasefire agreement for the Gaza conflict, expected to be submitted for discussion soon [5]

Core Viewpoint - The China Small and Medium Enterprises Development Index (SMEDI) for Q2 2025 is reported at 89.1, a decrease of 0.4 points from the previous quarter, but higher than the levels in 2023 and 2024. Overall, costs for SMEs have slightly decreased [1]. Industry Summary - The wholesale and retail industry index remained stable at 89.0, while seven other industries, including construction, transportation, real estate, social services, information transmission, and accommodation and catering, saw declines in their indices [2][3]. - The overall index for Q2 2025 is 89.1, down from 89.5 in Q1 2025, with all sub-indices showing a decrease, including macroeconomic sentiment, comprehensive operation, market, cost, funding, labor, input, and efficiency indices [4][5]. Regional Summary - The indices for the eastern, central, and western regions are 90.1, 89.7, and 88.6 respectively, all showing declines from the previous quarter, while the northeastern region saw a slight increase of 0.1 points to 81.5 [4]. Key Characteristics of SMEs - Business confidence is low, with the macroeconomic sentiment index at 98.2, down 0.8 points from the previous quarter, reflecting a decline across all surveyed industries [5]. - Market demand is contracting, as indicated by a market index of 81.2, which is a decrease of 0.3 points from the previous quarter [5]. - Funding conditions are tightening, with the funding index at 100.6, down 0.2 points, and six out of eight industries reporting declines in their funding indices [5]. - Labor supply is increasing while demand is decreasing, with the labor index at 105.9, down 0.1 points, and seven industries reporting a drop in labor demand [5]. - Investment willingness among enterprises is declining, with the input index at 82.3, down 0.6 points, particularly in construction, social services, and accommodation and catering sectors [5]. - Costs for enterprises have slightly decreased, with the cost index at 111.8, down 0.2 points, although the wholesale and retail sector saw a slight increase in costs [5]. - Efficiency has also declined, with the efficiency index at 74.2, down 0.3 points, and six industries reporting a decrease in their efficiency indices [6].

Core Insights - The Small and Medium Enterprises Development Index (SMEDI) in China rose to 89.5 in May, marking a 0.3 point increase from April, indicating a significant recovery after two months of decline [1][5]. Economic Performance - Since the beginning of the year, the production and sales of small and medium enterprises (SMEs) in China have shown continuous improvement, with innovation and vitality emerging strongly, providing robust support for industrial economic growth [3]. - The macroeconomic sentiment index, comprehensive operation index, market index, funding index, labor index, investment index, and efficiency index all increased in May, reflecting a positive trend in SME performance [5]. Industry and Regional Analysis - In May, six out of eight industry indices increased, with notable rises in sectors such as industry, transportation, real estate, wholesale and retail, information transmission, software, and accommodation and catering [5]. - The development indices for SMEs in the eastern, central, and northeastern regions increased, while the western region saw a slight decline [5]. Policy and Institutional Environment - The institutional environment for promoting SME development has been continuously optimized, with several new regulations and guidelines introduced to support SMEs, including the implementation of the "Private Economy Promotion Law" [7][8]. - The Ministry of Industry and Information Technology emphasized the need for legal administration and the establishment of a complaint platform to protect the rights of SMEs [7]. Future Outlook - There is a clear indication of improved expectations for SME development, with market demand steadily improving, funding conditions enhancing, and increased labor demand [6]. - The government aims to expand demand and revitalize consumption, while also addressing the challenges faced by SMEs through various supportive measures [6].

Group 1: Economic Indicators - In May, the macroeconomic sentiment index, comprehensive business index, market index, funding index, labor index, input index, and efficiency index increased by 0.7, 0.6, 0.2, 0.3, 0.2, 0.4, and 0.4 points respectively compared to the previous month, indicating a recovery in the economic sentiment of small and medium-sized enterprises (SMEs) [2][5] - The cost index remained unchanged from the previous month, suggesting stable overall costs for enterprises [6] Group 2: Industry Performance - In May, six industry indices increased while two decreased, with notable increases in the industrial, transportation, real estate, wholesale and retail, information transmission software, and accommodation and catering sectors, which rose by 0.6, 0.6, 0.2, 0.1, 0.4, and 0.4 points respectively [3][4] - The construction and social services sectors saw declines of 0.2 and 0.3 points respectively, indicating a mixed performance across industries [3][4] Group 3: Regional Development - In May, the development indices for SMEs in the eastern, central, western, and northeastern regions were 90.5, 90.3, 88.7, and 81.8 respectively, with the eastern, central, and northeastern regions showing increases of 0.3, 0.8, and 0.6 points, while the western region experienced a slight decline of 0.1 points [4] Group 4: Business Sentiment and Demand - The macroeconomic sentiment index reflecting business expectations rose to 98.9 in May, an increase of 0.7 points from the previous month, with significant increases in the industrial, construction, transportation, and accommodation sectors [5] - The market index improved to 81.5, with five out of eight surveyed industries reporting an increase in domestic orders and sales volume [5] Group 5: Financial Conditions - The funding index rose to 101, an increase of 0.3 points, with improvements in liquidity, financing conditions, and accounts receivable indices across most surveyed industries [5][6] - The investment willingness of enterprises increased, with the input index rising to 82.8, reflecting a positive outlook for future investments [6] Group 6: Business Efficiency - The efficiency index increased to 74.8, indicating a recovery in business performance, with four out of eight industries reporting improved efficiency [7] - The overall economic environment is influenced by recent policy measures and negotiations, contributing to a more favorable outlook for SMEs despite ongoing challenges [7]

Group 1 - The development index for small and medium-sized enterprises (SMEs) in China was reported at 89.2 in April, a slight decrease of 0.3 points from March, following a significant rise in the first quarter [1] - Among the sub-indices, 1 increased while 7 decreased, with 2 industry indices rising and 6 falling, indicating mixed performance across sectors [1] - The regional indices for SMEs showed declines across all areas, with the eastern, central, western, and northeastern regions reporting indices of 90.2, 89.5, 88.8, and 81.2 respectively, all lower than in March [1] Group 2 - The macroeconomic sentiment index, comprehensive operation index, market index, funding index, labor index, input index, and efficiency index all saw declines compared to March, with decreases ranging from 0.2 to 0.9 points [1] - The cost index shifted from a decrease to an increase, rising by 0.1 points from March, indicating a fluctuation in the economic environment for SMEs [1] - The real estate and wholesale retail sectors experienced a slight recovery, each increasing by 0.1 points compared to March, while other sectors like industry, construction, transportation, social services, information transmission software, and accommodation and catering saw declines [1] Group 3 - The executive vice president of the China SME Association emphasized the need to implement recent policies from the Central Political Bureau, including enhancing domestic market demand and providing support for private SMEs [2] - The government is encouraged to strengthen assistance for private SMEs to build resilience and create favorable conditions for stabilizing employment, businesses, markets, and expectations [2]

Core Viewpoint - The development index for small and medium-sized enterprises (SMEs) in China decreased to 89.2 in April, down 0.3 points from March, indicating a slight decline after a significant rise in the first quarter [1] Sub-item Index Summary - The sub-item indices show 1 increase and 7 decreases, with the funding index and labor index remaining above the critical value of 100. The macroeconomic sentiment index, comprehensive operation index, market index, funding index, labor index, input index, and efficiency index all decreased by 0.9, 0.3, 0.3, 0.2, 0.3, 0.5, and 0.2 points respectively compared to the previous month. The cost index shifted from decline to increase, rising by 0.1 points, indicating a fluctuation in the SME prosperity level [1] Industry Index Summary - In April, the real estate and wholesale retail industries saw a reversal, each increasing by 0.1 points compared to the previous month. Conversely, the industrial, construction, transportation, social services, information transmission software, and accommodation and catering industries decreased by 0.6, 0.3, 0.6, 0.3, 0.6, and 0.3 points respectively. The overall industry performance showed mixed results, with a still unstable foundation for recovery [1] Regional Index Summary - In April, the development indices for SMEs in the eastern, central, western, and northeastern regions were 90.2, 89.5, 88.8, and 81.2 respectively, reflecting decreases of 0.1, 0.5, 0.2, and 0.2 points from the previous month [1]

Group 1 - The SME Development Index for Q1 2025 is 89.5, an increase of 0.5 points from Q4 2024 [2] - The percentage of fully operational enterprises reached 50.4%, up 11.0 percentage points from the previous quarter [2] - The comprehensive operation index and market index rose by 1.1 and 0.7 points respectively compared to the previous quarter [2] Group 2 - The macroeconomic sentiment index increased by 0.5 points to 99.0, indicating improved business expectations [2] - The regional indices for SMEs in the eastern, central, western, and northeastern regions rose to 89.7, 89.9, 87.9, and 81.0 respectively [2] Group 3 - The market index for Q1 is 81.5, reflecting a 0.7 point increase, with five out of eight surveyed industries showing an upward trend [3] - Significant increases in market indices were noted in the information transmission software, social services, wholesale and retail, and transportation industries [3] Group 4 - The funding index improved to 100.8, up 0.2 points from the previous quarter, indicating better funding conditions [4] - The labor index rose to 106.0, reflecting a 0.3 point increase, with a notable rise in labor demand [4] Group 5 - There is an improvement in corporate investment willingness, with a slight decrease in costs and a significant improvement in corporate profitability [5] - The overall business conditions for SMEs are recovering rapidly, supported by holiday consumption and proactive measures taken by various regions [5]